The avenging scourge of JUSTICE! for AMERICA!n workers strikes another blow for THE! LITTLE! GUY!

SUCK! HARDER! AMERICA!

SUCK! HARDER!

AND! MAYBE! YOU'LL! GET! A! TIP!

The motorcycle maker in January told Kansas City workers it would close a plant there. Days later, it announced a nearly $700 million stock buyback plan.By Emily Stewart May 22, 2018, 8:00am EDT

In September 2017, House Speaker Paul Ryan traveled to a Harley-Davidson plant in Menomonee Falls, Wisconsin, to tout the Republican tax bill, which President Trump would sign later that year. “Tax reform can put American manufacturers and American companies like Harley-Davidson on a much better footing to compete in the global economy and keep jobs here in America,” Ryan told workers and company leaders.

Four months later and 500 miles away in Kansas City, Missouri, 800 workers at a Harley-Davidson factory were told they would lose their jobs when the plant closed its doors and shifted operations to a facility in York, Pennsylvania — a net loss of 350 jobs. Workers and union representatives say they didn’t see it coming.

Just days later, the company announced a dividend increase and a stock buyback plan to repurchase 15 million of its shares, valued at about $696 million.

It’s a pattern that’s played out over and over since the tax cuts passed — companies profit, shareholders reap the benefits, and workers get left out. Corporate stock buybacks hit a record $178 billion in the first three months of 2018; average hourly earnings for American workers are up 67 cents over the past year. Harley-Davidson is an American symbol, and President Trump has trotted it out as an example of business success. But as it’s getting its tax cut, it’s outsourcing jobs and paying shareholders.

The tax cuts aren’t saving jobs at Harley-DavidsonIt wasn’t just Ryan who made promises to Harley-Davidson. Trump in February 2017 met with Harley-Davidson executives and union representatives at the White House. He thanked the company for building in America and predicted its operations would grow.

“I think you’re going to even expand — I know your business is now doing very well, and there’s a lot of spirit right now in the country that you weren’t having so much in the last number of months that you have right now,” Trump said. He added that impending changes to “taxing policies,” health care, tariffs, and trade would only make things better.

The tax cut, at least, came through. The Republican tax bill, which slashes the corporate tax rate to 21 percent from 35 percent, is giving Harley sizable tax savings this year. The company estimates its effective tax rate — the amount it pays — will be 23.5 percent to 25 percent this year, about 10 percentage points lower than it would have been without the tax bill.

That’s a significant savings: The company makes about $800 million to $1 billion in pre-tax profit, according to Seth Woolf, an analyst at North Coast Research.

Just over a month after Trump signed the tax cuts into law, the Kansas City closure was announced. Workers found out when they arrived at the plant that morning: They were kept in the hallway, informed that the factory would be shut, and sent home for the rest of the day without pay. The union had no advance warning, said Greg Tate, a staff representative for the United Steelworkers District 11, which represents about 30 percent of the Harley-Davidson plant’s workers. (Harley-Davidson and the two unions that represent most of its production employees last year terminated their 22-year partnership agreement.)

“We really never had any belief that they were going to shut the Kansas City facility down,” Tate said. The announcement was “the first anyone found out about it.”

The company will cut 800 jobs at the Kansas City plant when it closes by the fall of 2019 and says it expects to add 450 full-time, casual, and contractor positions in its York facility — a net loss of 350 jobs.

The median household income in York is much lower than in Kansas City, and Tate said that hiring a casual workforce there — temporary workers brought in to boost production during peak season — will be easier and cheaper for Harley.

“This is a decision we did not take lightly,” Harley said in a statement. “The Kansas City plant has been assembling Harley-Davidson motorcycles since 1997, and our employees will leave a great legacy of quality, price, and manufacturing leadership. We are grateful to them and the Kansas City community for their many years of support and their service to our dealers and our riders.”

Harley-Davidson is also expanding overseasMeanwhile, Harley-Davidson is opening up a plant in Thailand, where it plans to start production later this year. (The company also owns and operates facilities in India and Brazil, and it is closing a facility in Australia.) The company says the Thailand plant isn’t meant to outsource jobs but to boost its international business and avoid tax and tariff burdens. Trump’s proposed steel tariffs could pose a threat to Harley and add an estimated $30 million to its costs, and the European Union has threatened to impose a tariff on the company’s motorcycles in retaliation.

Union leaders, however, have suggested that the Thailand plant opening and the Kansas City plant closing are tied together.

“Part of my job is being moved to York, but the other part is going to Bangkok,” Richard Pence, a machinist at the Kansas City plant, told the Milwaukee Journal Sentinel earlier this month when in Washington as part of a meeting between House Minority Leader Nancy Pelosi and members of the Association of Machinists and Aerospace Workers, which represents about 70 percent of the Harley-Davidson workers being laid off.

The Kansas City plant closing will cost Harley up to $200 million through 2019, according to Bloomberg’s estimates, and should result in annual savings of $65 million to $75 million after 2020.

Tate, from the steelworkers union, suggested the tax savings Harley reaped from the GOP bill might have actually freed up the cash for it to go ahead with the US restructuring plan now. “They have the capital now to move Kansas City, to shut it down,” he said. “All of that money really came from the tax cut plan, so it kind of had the opposite effect of what it was supposed to do.”

Woolf, the analyst, said he wasn’t sure that was the case. “I think what this reflects is that they’re finally coming to grips with the fact that the US market is contracting,” he said. Harley-Davidson has been struggling in recent years — sales have declined as its core demographic, baby boomers, ages and as millennials shy away from big bikes. The decline has been particularly acute in the US: Harley-Davidson’s motorcycle sales declined 8.5 percent in the United States in 2017 and 3.9 percent abroad.

The tax cuts let Harley reward shareholdersMeanwhile, since the tax cut, the company is managing to reward shareholders. Just days after revealing the decision to shutter the Kansas City plant, the company announced a dividend increase and a stock buyback plan to repurchase 15 million of its shares, valued at about $696 million.

On a call discussing the company’s first-quarter results in April, chief financial officer John Olin indicated that shareholder primacy will continue. “Beyond what we invest in the business, we will return and continue to return all excess cash to our shareholders,” he said. The company this year shut the media out of its annual shareholders meeting.

Harley-Davidson is one of a string of companies to announce major share buybacks since the tax bill was passed in December. Apple in early May said it would buy back $100 billion of its shares. The tech conglomerate Cisco in February said it would put an additional $25 billion toward a stock buyback. Troubled megabank Wells Fargo in January announced about $22 billion in buybacks. Pepsi announced a $15 billion buyback, Amgen and AbbVie $10 billion, and Google’s parent company Alphabet $8.6 billion.

Harley-Davidson isn’t the only company to shutter a US plant since the tax cuts were passed in December. The same day Kansas City workers found out their plant was closing, about 900 workers at an Electrolux plant in St. Cloud, Minnesota, found out the facility they were working in would be shutting down too. The Swedish home appliance company will consolidate its freezer production in South Carolina, where Joe Baratta, a representative for International Association of Machinists (IAM) Local 623, told me starting wages are lower.

He described a recent trip to Home Depot. “I see products that we were building here last year that say ‘Made in China’ with the Frigidaire name on it, they’re already in stores,” he said. “It’s a tough pill to swallow to go into every store in town looking at a product and saying, ‘There’s 150 jobs we lost. There’s another 200 jobs we lost.’”

Since Harley-Davidson announced its Kansas City plant closure in January, Trump — who made a big deal of saving jobs at a Carrier plant in Indiana in 2016 — hasn’t had anything to say about it, even when asked. IAM President Robert Martinez Jr. sent a letter to the White House asking him to save the Kansas City facility in March.

“For decades, hard-working Machinists Union members have devoted their lives to making high-quality, American-made products for Harley,” he wrote, later adding, “America’s working men and women deserve better than being thrown out onto the street. Our nation deserves better.”

An IAM spokesperson said Martinez met with White House trade adviser Peter Navarro on April 11 about the Harley closure, and he promised to follow up with the company’s CEO. The union had not received an official response from the president.

This is seriously very basic shit that most people learn in a basic MBA course. I worked nearly 2 decades at Goldman Sachs. That's why it's frustrating sometimes to have these conversations with people anonymously online but I digress.

lol. Your logical fallacy is appeal to authority. Although in this case the word authority should be in quotes.

Your explanation is completely off topic and does zero to address Bob and justme's point.

Seems like 30 years or so the focus became "shareholder" value over everything else in a lot of companies and the name of the game now is chasing the next quarters expected results and fuck everything and everyone else in the process.

The original premise is that investor A selling to investor B somehow helps the company. It does not. If you buy an IPO (or yes, a later issue) then you give new capital to the company, but any other trade could be a positive, negative or neutral.

Let's be honest: Buying company shares in the stock market does not constitute investing in a company. You are investing in future value increases of the shares, and not in the company. The company gets zero benefit from your stock purchase.

And the main point remains: No benefit to jobs from the Trump tax cut.

I'm having trouble seeing the link between the main point and being honest.

Yes the main point, if the government really wanted to create more jobs they would have held the tax cut as an incentive, a carrot, to get companies to investing in America, to hire American workers. Shit, this could have been combined with an even bigger tax break to verify that companies workers are legal.

But noooooo, just give companies a tax break with out any strings attached so that they are free to do with it as they please. Goran_k this is an example of how Trump isn't after Americas best interest but his own best interest. He never did close those loop holes that he said he would, which benefit him and not a large part of the rest of America.

But I digress, I still don't see the link and why one would say that one is not investing in the company? Of course you are investing in the company. When the company wants to buy back shares where do these shares come from? Thin air? No. They come from you, the investor who invested in that company. Sure, you might not be the original investor but you are the investor of record. Of course the company doesn't get a monetary benefit from the resale of a stock but saying they don't receive any benefit is just not true. How, as a company, is it not a benefit to know what people are willing to pay for your stock? One wouldn't consider this a benefit?

Buying company shares in the stock market does not constitute investing in a company. You are investing in future value increases of the shares, and not in the company. The company gets zero benefit from your stock purchase.

I think you're grasping at straws now. Is "knowing what people are willing to pay for your stock" really the benefit that Goran was claiming here?

It was explained many times. The company pps goes up on purchases giving it more liquidity and more money should they need to raise, it also benefits employee RSU and options plans who will make more money and will be more likely to stay. The premise that a stock purchase does not benefit the company is fundamentally wrong.

Moi ? Nada....I actually do due diligence before parting with any money for anything.

MAGA believers - well... no telling. They believed those 17,000 jobs that are still not here from the U.S. Steel CEO right after the election, thought Potus would save the Carrier jobs and the Rexnord employees were even more gullible and thought Potus and Pence would rush in and save them.

Some of them buy Chrysler products which have never been known for high quality and reliability since the late 1950s, kind of like the current Potus.

It's extremely easy to cherry pick, which is why I consider "cherry picked" arguments pretty cheap and of low value.

The truth is the U.S job sector actually has MORE jobs now than potentials looking for work. It hasn't reached this level in decades.

The economy is red fucking hot right now. My investment portfolio is thankful, I have not been richer at any point in my life. I'm in love with Trump's tax policies.

Goran_k this is an example of how Trump isn't after Americas best interest but his own best interest. He never did close those loop holes that he said he would, which benefit him and not a large part of the rest of America.

It was explained many times. The company pps goes up on purchases giving it more liquidity and more money should they need to raise, it also benefits employee RSU and options plans who will make more money and will be more likely to stay. The premise that a stock purchase does not benefit the company is fundamentally wrong.

Actually there have been many attempts to explain it with lamer and lamer explanations.

Share price going up does not give the company more liquidity. It may make it easier to issue more shares and dilute existing shareholders, but that lowers the price which is bad for the company, according to you.

And the stock option stuff is maybe true, but again, I can't believe this is the kind of stuff you guys are arguing. These are like 5th level effects.

Just because Democrats or Never Trumpers say companies only benefited doesn't make it so.

All the data and graphs show it. There has been no change to the overall trends in place since 2010. If anything, job growth is slowing. GDP growth is slowing. The tax cut did nothing to improve those.

All the data and graphs show it. There has been no change to the overall trends in place since 2010. If anything, job growth is slowing. GDP growth is slowing. The tax cut did nothing to improve those.

Before TRUMPLIGULA! rose to power, AMERICA! was a scorched wasteland where no one had a job, people lived in caves and the only standing edifices were mosques built in tribute to the Ayatollah Obama and his Minister of Death to Christians Michelle of the Huge Dick.

All the data and graphs show it. There has been no change to the overall trends in place since 2010. If anything, job growth is slowing. GDP growth is slowing. The tax cut did nothing to improve those.

Moi ? Nada....I actually do due diligence before parting with any money for anything.

MAGA believers - well... no telling. They believed those 17,000 jobs that are still not here from the U.S. Steel CEO right after the election, thought Potus would save the Carrier jobs and the Rexnord employees were even more gullible and thought Potus and Pence would rush in and save them.

Some of them buy Chrysler products which have never been known for high quality and reliability since the late 1950s, kind of like the current Potus.

It's extremely easy to cherry pick, which is why I consider "cherry picked" arguments pretty cheap and of low value.

The truth is the U.S job sector actually has MORE jobs now than potentials looking for work. It hasn't reached this level in decades.

The economy is red fucking hot right now. My investment portfolio is thankful,...

That Obama trend line you couldn’t even point to where Trump took office. Surprised you posted that, good on you

I think you're grasping at straws now. Is "knowing what people are willing to pay for your stock" really the benefit that Goran was claiming here?

I think Goran took a high level approch to explain why stock markets have value to companies. I say stock markets because without the resaleabilite of a stock there would be no stock market. Grasping at straws? Wow? Just trying to explain an easy benefit that one could observe as to why the resale of stocks has a benefit to the company.

The truth is the U.S job sector actually has MORE jobs now than potentials looking for work. It hasn't reached this level in decades.

Which brings up the question, why give a tax cut?

Wow only 67 comments to get to the obvious question. Unemployment is effectively zero, so why pass a tax cut to that is supposed to create new jobs? Especially when pursuing an agenda of restricting immigraiton.

I think Goran took a high level approch to explain why stock markets have value to companies. I say stock markets because without the resaleabilite of a stock there would be no stock market. Grasping at straws? Wow? Just trying to explain an easy benefit that one could observe as to why the resale of stocks has a benefit to the company.

Stocks were sold long before there were stock markets. As far back as the dutch east india companies. IPO's and additional issues have a benefit to the company. Exchanging outstanding shares has none.

Didn't Apple repatriate a shit load of $? How much did they end up paying in a 1 time payment to the IRS. Was is $38 billion? Oh yeah that's right it was $38 billion I wonder if any other companies took advantage of that loop hole.

I think Goran took a high level approch to explain why stock markets have value to companies. I say stock markets because without the resaleabilite of a stock there would be no stock market. Grasping at straws? Wow? Just trying to explain an easy benefit that one could observe as to why the resale of stocks has a benefit to the company.

OK--didn't mean to offend. But, like Bob said--the existence of a public stock market and ability to issue stock is a benefit to a company allowing it to sell ownership more easily to the public. Everyone agrees that is beneficial.

The question is how does one person selling said ownership to another person benefit the company?

Didn't Apple repatriate a shit load of $? How much did they end up paying in a 1 time payment to the IRS. Was is $38 billion? Oh yeah that's right it was $38 billion I wonder if any other companies took advantage of that loop hole.

Pretty sure many did, but it's better to have that money accounted for in the US. It's a global economy, low corporate taxes wins business.

I think Goran took a high level approch to explain why stock markets have value to companies. I say stock markets because without the resaleabilite of a stock there would be no stock market. Grasping at straws? Wow? Just trying to explain an easy benefit that one could observe as to why the resale of stocks has a benefit to the company.

Stocks were sold long before there were stock markets. As far back as the dutch east india companies. IPO's and additional issues have a benefit to the company. Exchanging outstanding shares has none.

How does a company value additional issues? I'd say it's by what someone is willing to pay for an existing share. If a company gets any information from the secondary market sale of it's stock it is getting a benefit. To claim otherwise is ignet

It depends--usually they hire a Investment bank to do some research to see the market clearing price for whatever number of new shares they want to issue. It's pretty much always less than the current price. How much less depends on a bunch of factors.

Let's see Trump Enterprises got a huge tax break, didn't share the wealth with its employees (we'd have heard about it otherwise) and instead of expanding here in the US they are expanding overseas. Why in the world would Trump think that the executives at Harley would behave better than his own sons?

Pretty sure many did, but it's better to have that money accounted for in the US. It's a global economy, low corporate taxes wins business.

Then companies should be moving en mass to the tax haven islands and places like paraguay and the stans. But it doesn't happen. People running multi billion dollar companies aren't stupid. They know things like stable government, rule of law, infrastructure, educated work force, access to capital, access to markets etc. are critical. The US has huge advantages. Those advantages cost money . For all the crying and moaning about moving out almost no companies did. Companies almost never relocate for tax reasons.

Why should they? They can game the tax system like Apple which books it's development expenses against it's US operations then moves the intellectual property to Ireland and books the profits there. Getting all the advantages of being a corporation in the US while paying very low Irish taxes. The tax cut gives them a get out of jail free card. Apple took all the advantages of being a US corporation for years and now has been forgiven all the tax obligation to pay for it. Even better going forward they will continue to put the costs in the US, book the profits in Ireland while incurring no tax obligation for all the advantages of being a US corporation. If you think anything more than a token amount of the profits they bring back from overseas is going for anything other that rewarding shareholders I have a bridge in brooklyn I 'd like to sell.

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